The violence erupted as youths, mainly students, marched in central Athens to mark the police shooting of a student in 2008, which led to the worst riots in decades and helped topple the conservative government in power at the time.

Police fired teargas at the protesters who pelted them with broken pavement slabs, sticks and petrol bombs for nearly an hour outside parliament this afternoon. Small groups set rubbish containers on fire and smashed shop and bank windows.

A second bout of violence broke out when thousands joined an evening march, prompting police use tear gas again and form a cordon outside parliament. As conservative leader Antonis Samaras - head of one of three parties backing new prime minister Lucas Papademos' coalition - took the podium in parliament to defend the 2012 budget, police outside chased youths into narrow side streets.

Over two dozen people suffered minor injuries, police and a Reuters journalist said. Fifteen people were detained.

The turnout was lower than similar protests in previous years and other recent demonstrations that drew tens of thousands, but remained a powerful reminder of the rising anger over austerity measures prescribed by Greece's creditors.

Greece will narrowly avoid bankruptcy this month after the European leaders and the International Monetary Fund agreed to dole out the latest tranche of financial aid that had been held up for weeks over political squabbling in Athens.

But the money comes at the price of painful reforms and many chanted slogans against the EU and IMF as they marched to parliament. Some held up banners like "Rise and join the December revolution". Minor clashes also broke out in the northern city of Thessaloniki.

"There is a silent anger, something like an undertow, and this is dangerous," said Mary Bossis, professor of International Security at the University of Piraeus.

The clashes took place just a few hours before politicians were due to vote on the 2012 budget, a package of tax hikes and spending cuts aimed at cutting the deficit and showing foreign lenders that the country is back on track to sorting out its finances.

The budget is designed to cut the deficit to 5.4 per cent of gross domestic product (GDP) from a projected 9 per cent this year and generate a surplus before interest payments.

The last time Greece managed a primary budget surplus was in 1993-2002, just after it joined the euro zone in January 2001. This time, the country's membership in the common currency is once again at stake as it pushes through the budget.

Most Greeks expect their economic situation to worsen next year, but they want to stay in the euro zone, a poll by GPO showed yesterday.

Despite the social tensions, Mr Papademos - a technocrat named last month to lead the country until early polls in February - is expected to win the vote easily given the broad backing his national unity coalition enjoys in parliament.

Since the country's debt crisis erupted in 2009, Greeks have repeatedly staged protests against austerity, which has helped push the country into a fourth year of recession and driven youth unemployment to a record high of more than 43 per cent.

In 2008, thousands of youths angry over unemployment and political graft battled police for weeks after 15-year-old Alexandros Grigoropoulos was shot dead.